New 15-Year Tenor for Tanzania

Tanzania is lengthening the maturity profile of its debt portfolio. On November 13th, it issued a 15-year bond, the longest available in the market. Currently, Tanzania’s Treasury securities have maturities ranging up to 10 years. The move to enlarge the spectrum of government securities is rooted in the willingness of the government to expand its capital markets. In October 2013, the government announced that it would open of its capital markets to East African investors, a decision that will facilitate the integration of the regional markets.

The five countries that comprised the East African Community (Kenya, Rwanda, Tanzania, Uganda and Burundi) held a meeting in November 2013 to plan the establishment of a regional capital market. Legislations to this effect has already passed and the EAC has received support from the Swedish government for the implementation of a regional bond market.

The 15-year, 13.5% coupon security received the approval of the industry: the Shs15 billion issue was 1.5 times oversubscribed. The Tanzanian authorities greeted this launch by stating that the bond offer is the continuity of the expansion of the financial sector and of the economy. Proceeds of the sale will be used towards financing large infrastructure projects.